Instead of emphasizing the design details, the document describes abstract advantages and disadvantages, costs and benefits, and risks and opportunities of issuing a CBDC. According to the RBNZ, the document “is the starting point for a conversation with stakeholders on the potential role of a CBDC for New Zealand.”
The Central bank observed that the development of a CBDC requires multiple levels because of its intrinsic complications, and the multiple design and policy choices involved.
Consequently, the RBNZ is implementing a multi-level approach to its policy development, with the document release being the first stage in the process.
According to the RNBZ, the emergence of payment technologies and the decline of fiscal cash usage is enough motivation to consider a CBDC, as cryptocurrencies should not only support the New Zealand dollar but will also be exchanged 1:1 with cash.
In anticipation, the RBNZ expects that a CBDC will easily support the role of the central bank in several ways. For example, it should give individuals and businesses the opportunity to convert privately-issued money into a digital form.
It should also improve the technological form of central bank money, guaranteeing its relevance in the future. The RNBZ could issue the CBDC to provide monetary stimulus as an additional monetary policy tool.
In conclusion, the CBDC is expected to improve domestic payments as well as enable citizens of New Zealand to participate in cross-border payments.
Continue reading on BTC Peers
Source: Cryptocurrency - investing.com
